Report: 11 firms pitch Indian wafer fabs

LONDON – The Indian government has received approaches from 11 companies with regard to locating wafer fabs in India, according to a Business Standard report, which referenced as its source P.S.Narotra, a senior director in the Department of Information Technology within the Ministry of Communications and Information Technology.

"The Department of Information Technology (DIT) has received proposals from 11 companies to set up wafer fabrication plant in India. There are a couple of domestic firms and the others are foreign firms," the report quotes Narotra telling reporters on the sidelines of the Electronica India exhibition, being held in Bangalore.

The companies were responding to an advert published at the end of June by the recently set up Empowered Committee. The committee, set up in April, is chartered with helping set up at least two wafer fabs at a projected cost of about $5 billion. The committee is in place to identify technologies and investors and to negotiate the level and nature of government support and the mix of grants and subsidies.

The companies were not named but Narotra said that some were seriously pursuing the opportunity and seeking additional information, the report said.

India is keen to set up local manufacturing because it can foresee exploding demand in India for consumer electronics which is set to be met by imports the country can ill-afford. Local chip manufacturing will not only offset those imports but, the government believes, bolster an ecosystem from chips through software to systems.

It is a strategic decision which the country has taken. I am sure it will stand India in good stead by the end of this decade, both commercially and otherwise. Infrastructure needs specifically for the fab are trivial and addressable issues. In the 1960s, India was world class in transistor technology. But somehow we missed the microelectronics bus, due to policy decisions at the time. High time to correct this situation, (in fact quite overdue). Once the fab is up and running, it will surely be a commercial success, just catering to India's own needs; supported by some policy initiatives by Govt. The design and mfg ecosystem will automatically cluster around the fab and grow, once in place.

I do agree with the optimistic outlook. But as you have rightly pointed out, "India has the capacity to establish the required power". Many of the developing countries have the capacity to provide basic amenities to the populace but its the management of resources that causes the scarcity.
True. India is pacing towards IT, ChipDesign and Auto industries. But there is a significant, magnitude-level difference between Semiconductor mfg and the above industries.
The cost of a "production stop" due to any of the "lack of resources" will be far more costly when compared to a production stop in IT/Auto industries.
Also, by the time India establishes semi mfg as a domestic industry, the technology may change by 2 or 3 nodes, not to mention the wafer size/s.
Secondly, the talent is also a concern. Although there are many Indians
in world-wide-semi industry, most of them have PhD/MS degrees from other countries (US/UK/EU/Singapore/etc). India has to think about building academic programs & R&D capabilities to train the advanced tech force required for this job. A time-consuming task.
Ofcourse, India can enter the semi mfg industry. But the question is - is it advantageous to do so? As "NAND_Analyst" pointed out above, India can strategically use its chipdesign/ IT skills to enter the "Fabless" sector.
There are many parallels between semiconductor and solar sectors. Quite a few research parks are trying to apply the "SEMATECH" research model in solar industry as well. The industry is nascent and India has plenty of Solar radiation/year, compared to Germany which is leading the industry right now. It can solve the energy solutions as well.
I am very interested in knowing what the 11 firms + Indian Govt is basing their argument in coming up with this idea? The reasons mentioned so far do not stack up to the weight of the argument.

IMHO, they would be better off targeting solar in order to get energy independent as soon as possible. That would help the environment as well. Both solar and chips are terrifically competitive industries, but energy will affect everything and anything that they do, and a properly planned distributed solar energy system will improve the daily life of everyone in the country in fundamental ways. Chip design is more important for them to have than actual chip manufacturing--fabless is the only way to go with Samsung and Intel both entering the foundry business, joining TSMC.

When a country makes a policy decision it has long term effects in mind. So the short term problems like TSMC having spare capacity and Brazil finding it difficult to stabilize its FAB should not deter a govt from taking such a decision.
As far as the power situation is concerned , India has the capacity to establish the required power infrastructure.
Considering India's progress in other areas such as IT , Chip design services, Automobile manufacturing and also considering its strategic importance in the Asian region it comes as a no surprise to me that Indian Govt is taking such a bold decision.

My understanding is that the Indian government thinks the country should be making Significant amounts of hardware domestically, meaning chips and equipment. Otherwise it's IT bill in future will grow to exceed it's fuel import bill. The logic is also that without Oil and IT India cannot raise the standard of living for it's citizens.
And if it is a net importer of fuel and IT what will it export to pay for these.
The conclusion seems to be that india needs to start down the road previously taken by Japan, South Korea, Taiwan and China.

As much as I love India and its people I do not understand why they need a $3-5B fab? They are great with design but why a fab? Brazil tries to pull off a Front End Fab and has problems since years. I also heard that water and power are issues.

This article is a follow-up to an earlier eetimes article from Apr 21.
http://www.eetimes.com/electronics-news/4215358/India-launches-yet-another-fab-initiative
There it mentions India's govt target of 2020 for a chip industry, which is far too late to rely on current situation. It also mentions drifting interest toward PV, which makes some sense. Bad for US though.

This shows that 11 companies studied well about starting in India. Probably the recent automation in India's Government offices functioning on online which has reduced the bottlenecks at many instances. Soon i feel India will reach its destination for a clean functioning of the Government policies.